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4 Things Parents Should Know Before Paying for College

college_campus

Financial Specialist Shares Ways to Help Your Child
 While Protecting Your Retirement

From $20,000 to $65,000 a year – that’s the tuition cost for one year of college, says John McDonough, a money expert who helps retirees and parents plan for their families’ futures.

“For the 2012–2013 academic year, the average cost for an in-state public college is $22,261. A moderate budget for a private college averaged $43,289,” says McDonough, CEO of Studemont Group College Funding Solutions, www.studemontgroup.com. “But for elite schools, we’re talking about three times the cost of your local state school. Either way, your kid’s higher education can easily shoot into six figures after four years.”

Along with worrying about rising tuition prices, parents also fear for their own futures if their retirement savings are drained by children’s college costs, McDonough says. Only 14 percent, for example, are very confident they’ll have the money to live comfortably in retirement, he says, citing a 2012 survey by the Employee Benefit Research Institute.

“Families feel they’re faced with conflicting goals, but there are numerous ways to pay for college while investing in your future retirement,” says McDonough, who offers insights for parents to keep in mind while planning for their child’s education:

• The ROI of a college education: At a time when so many American families are financially strapped, college is an especially stressful topic because parents know higher learning will help their kids succeed. College graduates earn 84 percent than those with only a high school diploma, according to Georgetown’s Center on Education and the Workforce. Here is how earning breaks down over one’s life time, based on education: a doctoral degree-holder will earn $3.3 million over a lifetime; $2.3 million is estimated for a college graduate; those with only a high school diploma can expect $1.3 million.

• Move retirement assets to qualify for grants: Most parents know about the 529 savings account, but that’s not necessarily the best or only option. Reallocating your retirement assets, such as 401(k)s, can better position a child to qualify for grants and scholarships. This legal and ethical maneuvering may be the single most important factor when considering how to pay for college.

• Know your student’s strengths and weaknesses: Consider independent and objective analysis of your future college student. Assessment might include a personality profile and a detailed search for a future career. Also think about a more nuts-and-bolts approach, including scholarship eligibility, SAT and ACT prep courses, review of admissions essays and an in-depth analysis of chances for enrollment in a student’s top four choices of colleges.

• Make a checklist of financial aid forms: In order to maximize a fair price of higher education, remember there is plenty of data to review. McDonough recommends a checklist with a timeline and notable deadlines. Be ready to troubleshoot the “alphabet soup” of data forms: FAFSA – Free Application For Federal Student Aid; CSS profileCollege Scholarship Service; SAR – Student Aid Report; and more. Think about this process as a second job, or find professional help you can trust.

About John McDonough

John McDonough is the managing member at Studemont Group, which is primarily focused on helping retirees gain peace of mind with unique market rescue and recovery programs. He is also founder, president and CEO of Studemont Group College Funding Solutions. His experience in the financial services industry includes managing partner at Granite Harbor Advisors in Houston and divisional vice president of AXA Equitable/AXA Advisors, the third largest insurance company in the world. McDonough is a member of the prestigious Forum 400, a qualifier at the Court of the Table qualifier for Million Dollar Round Table, an active member in National Association of Insurance and Financial Advisors and Society of Financial Service Professionals, as well as American Association of Life Underwriters. He has completed the course work to sit for the Certified Financial Planner® professional designation exam from Rice University.

 

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5 Steps to Staying Motivated and Avoid Living in a Van Down By the River


PCC Advantage | 16 February, 2011 at 11:50 am 

If you are old enough to remember when Chris Farley was on Saturday Night Live, then you most likely remember the infamous words of his most famous character, Matt Foley. You see, Matt was a divorced motivational speaker…who lived in a van down by the river (the very thought of that guy doling out advice to people while his life was a spectacular failure still causes me to laugh). So, how do you stay motivated enough in your college career to ensure that your future does not involve you living out of your van?

The first thing that you need to remember is that the choices you make while you’re in college will (most likely) affect the rest of your life. So, while you’re studying, use these tips to ensure that you won’t end up like Matt Foley:

1. Choose the right major/diploma for yourself. Really think about what drives you, where your passions are, and how you can use that knowledge within a career.

2. Speak to your classmates on a regular basis. Sometimes the greatest motivation is speaking to others about the same issues you may be facing, whether it is sharing ideas, developing a study group, or simply sharing your passions with them.

3. Make a plan. Write out each step that you must take to achieve your goals, and display it in a visible area where you can see it each day.

4. Reward yourself. When you have completed a major task, buy a new sweater, eat at a fancy restaurant, meet a friend for coffee, go for a run, etc.

5. Surround yourself with others who have similar goals as you. As the saying goes, “a man is known by the company he keeps”, so ensure that you have positive people surrounding you that will encourage and support you, and do the same for them.

As long as you use tips such as these and continually remind yourself of why you’re working so hard, you will succeed in whatever it is that you’ve put your mind to.

And of course you want to be successful in life. Because let’s face it…as cool as those retro VW vans might be, you certainly don’t want to be 34 years old, thrice divorced, and living in one down by the river.

 

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